Environmental Groups Tell NRC to Strengthen Rules Barring Foreign Ownership of U.S. Reactors; Bring Them Into Line With Congressional Intent

For Immediate Release

Environmental Groups Tell NRC to Strengthen Rules Barring Foreign Ownership of U.S. Reactors; Bring Them Into Line With Congressional Intent

WASHINGTON - A cross-section of national, regional and local environmental organizations from every part of the country today joined in comments to the Nuclear Regulatory Commission urging strengthening of the agency’s rules that implement the Atomic Energy Act’s prohibition against foreign ownership, control or domination of a U.S. nuclear reactor project.

The NRC Commissioners ordered a review of its regulatory guidance in a March 11, 2013 order upholding the denial of a construction/operating license to UniStar Nuclear—a company owned by Electricite de France (EDF)—for the proposed Calvert Cliffs-3 nuclear reactor in Maryland on foreign ownership grounds.

Earlier this week, EDF announced that it is permanently leaving the U.S. nuclear power market and will no longer attempt to build new reactors here.

The four organizations which successfully intervened against the Calvert Cliffs-3 license—Nuclear Information and Resource Service (NIRS), Beyond Nuclear, Public Citizen and Southern Maryland CARES—were joined by 62 more groups in submitting the comments.

The comments said the NRC that the agency does not have the authority to allow 100% foreign ownership, whether direct or indirect, of a U.S. reactor project. The groups also warned the NRC that some of the areas it sought comment on appear to be an effort to undermine the law, which Congress has left intact since 1954.

The groups wrote, “In short, there is no need for greater clarity on the question of whether a corporation that is 100% foreign owned is eligible for an NRC license. It simply is not. The only legitimate questions are, for an entity that is less than 100% foreign owned, what is the standard for control or domination? “

An examination of the legislative history of the foreign ownership provision of the Atomic Energy Act conducted for NIRS revealed that Congress initially had proposed to ban any foreign ownership of more than 5% of a U.S. reactor. However, witnesses for the nuclear industry and other interests testified that it is difficult for publicly-traded companies to even know if they are as little as 5% foreign-owned, and suggested that the language be similar to the Federal Communications Act, which then—as it remains today—prohibited more than 25% foreign ownership of a broadcast facility. In response, Congress dropped a numerical cap and added the phrase prohibiting foreign “control or domination.” No witness, and no Member of Congress, suggested that foreign ownership of more than 25% would ever be acceptable.

Over the years, however, the NRC has tried to interpret the Act as allowing a significant portion of foreign ownership, and its regulatory guidance has been inadequate to allow full examination “control or domination” issues in increasingly complex corporate structures.

The issue has come up again at the South Texas Nuclear Project, where intervening organizations have charged that the two nuclear reactors proposed there would be owned, controlled and dominated by the Japanese company Toshiba. The NRC staff agrees with the intervenors and issued a letter stating that a license cannot be granted for the project. An Atomic Safety and Licensing Board has scheduled a hearing on the matter in October.

The groups urged the NRC to bring its guidance into compliance with Congressional intent by taking three steps:

“We recommend that NRC’s FOCD guidance be improved, and brought into compliance with the letter and intent of the Atomic Energy Act, by:

· Clarifying that majority foreign ownership, whether direct or “indirect,” of a U.S. reactor project will always be grounds for rejection of a license application, and revising the guidance to reflect legislative intent by limiting foreign ownership to no more than 25% of a U.S. reactor project.

· Revising the guidance to address the increasingly complex nature of many of the corporate structures that have been proposed by license applicants in recent years.

The NRC therefore must thoroughly examine corporate structures submitted by applicants to ascertain whether foreign “control or domination” may be present. This includes not only the nature of ownership of the applicants themselves, but also ownership of Limited Liability Corporations and other subsidiaries associated with the project; whether, in cases where more than one company is involved (i.e. a joint partnership or similar structure) one of the partners involved is also an owner of one or more of the other partners; the financial stake of each of the partners in the project; the nature of financing for the project; the presence of other participants in the project (whether or not they may have a direct ownership stake) that may add to control or domination issues.”

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